The origin recognition complex (ORC) marks chromosomal positions as replication origins and is essential for replication initiation. At a few loci, the ORC functions in heterochromatin formation. We show that the ORC's two roles at the heterochromatic HMRa locus in Saccharomyces cerevisiae were regulated by differences in the ORC's interaction with its target site. At HMRa, a strong ORC-DNA interaction inhibited and delayed replication initiation but promoted heterochromatin formation, whereas a weak ORC-DNA interaction allowed for increased and earlier replication initiation but reduced heterochromatin formation. Therefore, the ORC's interaction with its target site could modulate ORC activity within a heterochromatin domain in vivo.